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Khaleej Times
05-07-2025
- Business
- Khaleej Times
Abu Dhabi housing faces affordability test as population rises; could legal partitions help?
Soaring demand for affordable homes in Abu Dhabi is set to intensify as the capital's population climbs towards 5.4 million by 2040, with industry insiders warning that current supply chains could leave lower‑ and middle‑income residents scrambling for unregulated options. An Abu Dhabi housing expert says regulators should rethink the focus on new luxury developments and instead tap into the city's existing building stock. 'More sensible options would be to renovate older stock and make [it] friendly to those in multiple occupations,' said Ben Crompton, managing partner at Crompton Partners. He added that authorities ought to 'permit the legal and approved partition of villas and apartments to allow those with lower incomes to live safely and within regulations.' Crompton highlighted a mismatch between what's being built and what most people can afford. 'Currently most launches are upper mid‑market to super‑luxury and the other price points aren't being serviced,' he explained. 'There seems to be a very large gap between supply and demand at a lower level, but we aren't seeing it pushing prices just yet. It seems there was some slack in the system at the lower price points, but a broad‑based increase in population will stress this sector.' Projects launched since 2020 have predominantly been priced above Dh10,000 per square metre, forcing incoming residents to turn to older, cheaper properties and — potentially — to shared or partitioned units. Legalise shared housing? With Dubai's recent crackdown on illegally partitioned villas fresh in mind, the risk of a similar scenario unfolding in Abu Dhabi is real. 'Yes, I think this will happen,' Crompton warned. 'Sections of the new population coming in will need to look elsewhere, in older stock and into partition units.' Rather than rely solely on enforcement, he argues, the capital should formalise and regulate shared living arrangements. Renovation over new builds Given today's construction costs, Crompton believes that repurposing existing buildings is the quickest path to impact. 'Developers face a big issue; most of the profit is in the more expensive projects. Given the price of construction — even with cheap land — it is hard to develop affordable housing. More sensible options would be to renovate older stock and make [it] friendly to those in multiple occupations.' This approach addresses urgent affordability concerns while supporting sustainable urban renewal. Nonetheless, not all new arrivals will strain the affordable segment. 'Given that one of the major population drivers in Abu Dhabi is the ADGM on Maryah Island and the huge number of hedge funds and asset managers relocating there, we expect to see a larger emphasis on luxury real estate than might otherwise be the case." Furthermore, limited new delivery will push up rents and prices. According to most reports only about 3,000 units were delivered in 2024; 'couple that with an increase in population of 300,000 — that is 100 new entrants per unit. Pressure on prices is inevitable.' On whether new mega‑projects drive population growth, Crompton said their role is more about attraction than generation. 'I don't believe that building real estate has much of an effect on population by itself, outside of the people hired in to work for developers and construction companies.' However, assets like the Guggenheim and the Disney theme park make Abu Dhabi more attractive to people who can choose where they want to live. 'Most new arrivals will be coming to work in the thriving economy, but a small number have independent means or can work remotely and they are drawn by these signature developments.' Suburban and satellite communities being on the rise will push development further afield. 'There needs to be more development outside the current corridors across Reem and the Northern Islands,' he said. 'Broad‑based demand will mean people looking for more affordable options and these will necessarily be further out.' Crompton noted that growing populations underpin market confidence: 'Population growth means increases in rents which by itself drives investor sentiment. If you are buying property as an asset you need returns, and rents bring those,' he explained. 'Also, the more people coming into the emirate means more potential buyers, and demand improves prices.' He cautioned that matching supply to demand is inherently difficult. 'Being a developer is a very tricky occupation. Launch to handover is at best two and a half years and that doesn't include the planning phase. It will be very hard for developers to accurately gauge demand three years into the future, and the difficulty in doing this is one of the reasons why countries generally often over‑ and under‑build for their populations.' Finally, Crompton noted little current policy emphasis on budget‑friendly segments; 'there doesn't seem to be this focus currently. Most developer launches are in the upper mid‑market range to super‑luxury. Launches in the Dh10,000 per square metre and below ranges are very rare.'
Daily Mail
25-05-2025
- Business
- Daily Mail
EXCLUSIVE The common features that wipe up to $50k off your home's value, by star realtor from America's land of immaculate homes
Your home could be worth tens of thousands less than you think - and it might not be anything you've done wrong. A realtor has warned that property values can plummet by up to $50,000 due to seemingly minor issues.
